This bill creates new, temporary sales and use tax exemptions for medical equipment and medical supplies purchased by a defined class of critical access hospitals. It adds new sections to chapter 82.08 RCW (sales tax) and chapter 82.12 RCW (use tax) to exempt qualifying sales and uses beginning January 1, 2026, and expiring January 1, 2036. The exemptions exclude construction materials, office and building equipment, administrative supplies, and vehicles not used for patient transportation. The bill defines "critical access hospital" as a public hospital on an island within 25 miles of a military installation with a critical access designation from the Centers for Medicare and Medicaid Services, defines "medical equipment" and "medical supplies" in general terms with examples, and requires an unnamed department to adopt implementing rules and to publish electronically a list of qualifying medical equipment and supplies. The measure includes a tax preference performance statement categorizing the preference under RCW 82.32.808(2)(e), states the policy objective to reduce sales and use tax burden on island critical access hospitals, and directs a review of the preference over the initial three biennia after enactment; an extension is contemplated only if the actual fiscal cost does not exceed the fiscal note estimate by more than 5 percent. The joint legislative audit and review committee is authorized to use state-collected data and taxpayer information for that review. The text cites RCW 82.08.020 and refers to "sections 1 and 2, chapter . . ., Laws of 2025" but does not name the specific department responsible for rulemaking, does not include the text of RCW 82.08.020, and omits the chapter number in the performance statement.

If enacted, public hospitals on islands within 25 miles of a military installation that have the federal critical access designation will no longer pay Washington sales or use tax on most purchases and uses of medical equipment and supplies starting January 1, 2026 until January 1, 2036. Those hospitals should see lower operating costs for things like gloves, syringes, dressings, catheters, and medical machines, which could free up funds for patient care or other expenses; sellers of those qualifying items will no longer collect tax on those sales, and state tax revenue will decrease accordingly. The exemption does not cover construction and building materials, office and administrative equipment, or vehicles not used for patient transport. The unnamed state department must write rules and post an electronic list of what counts as qualifying equipment and supplies, so hospitals and vendors will need to follow that list to claim the exemption. The Joint Legislative Audit and Review Committee can use state data and taxpayer information to review the policy during the first three biennia and the law allows extending the exemption only if the actual fiscal cost stays within 5% of the original fiscal estimate; however the bill text here does not say which department will administer the list, it does not include the fiscal note or chapter number cited, and some day-to-day details about applying the exemption will depend on rules yet to be written.